CONFLICT OF INTEREST
WATER MANAGEMENT DISTRICT GOVERNING BOARD
MEMBER EMPLOYEE OF LANDOWNER PARTY TO
WATER PROJECT AGREEMENT WITH DISTRICT
To: Cari L. Roth, Attorney for Governing Board Member (SFWMD)
Due to applicability of the "sole source" exemption of Section 112.313(12)(e), Florida Statutes, under the circumstances presented, a prohibited conflict of interest would not be created under either Section 112.313(3) or Section 112.313(7)(a), Florida Statutes, were a water management district to enter into a water project agreement with a landowner of which a member of the district's governing board is an employee and corporate officer. CEO 10-4, CEO 06-28, CEO 00-10, and CEO 90-39 are referenced.1
Would a prohibited conflict of interest be created for a member of the governing board of a water management district were the district and a landowner of which the member is an employee/corporate officer to enter into a water project agreement?
Under the circumstances presented, your question is answered in the negative, due to applicability of the "sole source" exemption of Section 112.313(12)(e), Florida Statutes.
By your letter of inquiry and accompanying materials, we are advised that Joe Collins ("member") serves as a member of the governing board of the South Florida Water Management District ("WMD" or "District"), beginning his service in July 2009. In addition, we are advised that the member is employed by and is a corporate officer2 of a major landowner within the District, with which the District is contemplating entering into a water project agreement. The project,3 you advise, would involve water storage, water release, and related water management activities regarding in excess of fifteen thousand acres of the landowner's property west of Lake Okeechobee, and would be implemented via a lease/project agreement between the District and the landowner.
Also, you advise that the project would advance mandates or efforts4 to achieve better water quality and related goals regarding the Lake, the Caloosahatchee River, and other waters.
In addition, you advise that these mandates or efforts and their consideration by the WMD (including consideration of matters regarding the instant project) predate the member's appointment to the WMD's governing board and that the District's staff has determined that the project is uniquely situated to address water quality and quantity issues. You also state that the member has not advised or discussed the desirability of his employer's property for the project with any District employee or fellow governing board member since his appointment, that the member will continue to refrain from voting and participating as a governing board member regarding project matters, and that he will have no part in (either as a governing board member or in behalf of his employer) the negotiation of project terms or communications between the District and his employer.
Statutes within the Code of Ethics for Public Officers and Employees (Part III, Chapter 112, Florida Statutes) relevant to your inquiry provide:
DOING BUSINESS WITH ONE’S AGENCY.—No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer’s or employee’s spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer’s or employee’s spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to the officer’s or employee’s own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator’s place of business or when such offices are on property wholly or partially owned by the legislator. This subsection shallnot affect or be construed to prohibit contracts entered into prior to:
(a) October 1, 1975.
(b) Qualification for elective office.
(c) Appointment to public office.
(d) Beginning public employment.
[Section 112.313(3), Florida Statutes.]
CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.—No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee . . .; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]
EXEMPTION.--. . . In addition, no person shall be held in violation of subsection (3) or subsection (7) if: (e) The business entity involved is the only source of supply within the political subdivision of the officer or employee and there is full disclosure by the officer or employee of his or her interest in the business entity to the governing body of the political subdivision prior to the purchase, rental, sale, leasing, or other business being transacted. [Section 112.313(12)(e), Florida Statutes.]
Absent applicability of the "sole source" exemption of Section 112.313(12)(e), we would find that a prohibited conflict would be created for the member under Sections 112.313(3) and 112.313(7)(a) were the District to enter into the agreement with the landowner; it is plain from the situation described that facts necessary to meet the elements of the prohibitions would be present.
However, we find that the exemption would apply to negate the prohibitions for the member, were the District to enter into the project agreement with the landowner (his employer). The situation presented provides abundant factual support5 to satisfy the central legal requirement of the exemption: that the business entity (here, the corporation/landowner employing the member) be the only source within the political subdivision6 from which a public officer's government entity (here, the WMD) could obtain its needed item (here, water management use of a property uniquely suited to the needs of the WMD). Our decision herein is in accord with prior decisions of ours finding the exemption to be applicable. See, for example, CEO 10-4 (county commissioner's husband selling to county real property adjacent to county park), CEO 06-28 (assistant principal selling real property to school district for construction of new school), and CEO 00-10 (CRA employee owner of television station selling advertising to CRA).
Accordingly, we find that the "sole source" exemption of Section 112.313(12)(e), Florida Statutes,7 applies to negate conflicts for the member arising under Sections 112.313(3) and 112.313(7)(a), Florida Statutes, occasioned by his employer's entering into an agreement with the WMD for the proposed water project.
ORDERED by the State of Florida Commission on Ethics meeting in public session on February 4, 2011 and RENDERED this 9th day of February, 2011.
Vice President of Lykes Bros., Inc. – Ranch Division.
Nicodemus Slough Water Management Project.
Section 373.4595, Florida Statutes (Northern Everglades and Estuaries Protection Program), Lake Okeechobee Protection Program, Caloosahatchee River Watershed Protection Program, St. Lucie River Watershed Protection Program, Lake Okeechobee Water Protection Plan.
We find it unnecessary to restate herein all of the particulars of your inquiry supportive of the landowner being the sole source. However, some, from the Sole Source Justification document generated by WMD staff relative to the proposed project, included in your inquiry, are: "These existing connections, unique to the project location, provide the exclusive opportunity for year-round, multi-purpose, water management operations."; "While other projects may provide smaller quantities of water storage or treatment benefits, they cannot offer the multiple source, multiple year-round benefits and operational options of this project."; "In addition to the site's unique location, the project as proposed offers a significant level of water resource benefits. The site, as it exists today, has a significant amount of existing infrastructure, including 15.7 miles of existing perimeter levees."; "In summary, in comparison to other constructed or assessed water management projects, the Nicodemus Slough Project will provide significantly more water resource benefits." .
We find that the District is a "political subdivision" for purposes of the exemption. Section 1.01(8), Florida Statutes, provides that "[t]he words 'public body,' 'body politic,' or 'political subdivision' include counties, cities, towns, villages, special tax school districts, special road and bridge districts, bridge districts, and all other districts in this state." And, in CEO 90-39 (water management district board applicant employed with laboratory receiving funds from the district), we suggested possible applicability of the exemption.
Of course, the member must complete and file CE Form 4A prior to the District and the landowner entering into the agreement. And, the member must comply with Sections 112.3143(3)(a) and 112.3143(4), Florida Statutes, utilizing CE Form 8B, regarding votes/measures/matters of the District concerning any entry of the District into an agreement with his employer or concerning any other District item which would inure to the special private gain or loss of his employer or others listed in those statutes.